Korea’s top 3 mobile carriers under government scrutiny on pricing

Korea’s top 3 mobile carriers under government scrutiny on pricing

South Korea’s three wireless carriers - SK Telecom Inc., KT Corp., and LG Uplus Corp. came under scrutiny by government authorities suspecting them of collusion and other unfair practices as they stay resistant to the new government’s pressure to lower their service fees.

Industry sources said the Fair Trade Commission embarked on an investigation on the three carriers on suspicion of collusion in phone rates. The antitrust agency said it was probing at the petition of consumer groups that have questioned their fee plans. In May, the People’s Solidarity for Participatory Democracy demanded probe into the three players, questioning the similarity in their policy options on voice call and pay-per-use data introduced in 2015.

Separately, the top wireless supervisory authority Korea Communications Commission (KCC) began probe into the companies’ consumer notifications on discount option when extending contract.

The KCC said it would be scrutinizing whether the three mobile carriers have properly and clearly explained their subscribers on discount option when nearing termination on their contracts.

The simultaneous scrutiny is suspected of mounting pressure on the industry to cut the phone bills for mobile phone users, which was a campaign pledge by President Moon Jae-in.

The government in June announced measures to lower mobile expenses by upping monthly discount rate for a mobile phone subscription agreement from the current 20 percent to 25 percent and exempting 11,000 won basic monthly subscription fee for the elderly and low-income household members. But the industry has been protesting to the guideline as state intrusion in business policy.